Sino-Ocean Group reported interim revenue of RMB6.60 billion for the six months ended 30 June 2026, a 6% year-on-year rise, driven by a 25% increase in property-development income to RMB4.11 billion. Saleable gross floor area handed over expanded 52% to 0.52 million sq.m., though the recognised average selling price slid 24% to RMB8,300 per sq.m.
Gross profit turned marginally positive at RMB15.00 million, reversing a RMB4.97 billion loss a year earlier and lifting gross margin to 0.2%. The recovery, however, was offset by a sharp fall in one-off debt-restructuring gains to RMB0.28 billion (1H25: RMB31.76 billion), continued market softness and additional impairment charges. Consequently, the group swung to a net loss attributable to shareholders of RMB7.15 billion versus a RMB10.20 billion profit in the prior-year period.
Contracted sales fell 39% to RMB8.14 billion, alongside a 20% decline in sold area to 0.68 million sq.m. Average contracted selling price, excluding car-park sales, dropped 30% to RMB13,300 per sq.m., reflecting fewer first-tier city launches.
Operational costs improved: selling and marketing expenses contracted 45% to RMB199 million, and administrative expenses eased 14% to RMB545 million. Finance costs declined 25% to RMB2.07 billion, though the average interest rate climbed to 8.23% from 5.84% due to debt-restructuring amortisation.
Total borrowings edged down to RMB50.39 billion from RMB50.85 billion at end-2025; 65% carry fixed rates and 81% are RMB-denominated. Cash and restricted deposits stood at RMB6.37 billion, yielding a current ratio of 0.87. Net gearing remained deeply negative at –749%, reflecting negative equity after accumulated losses. Approximately RMB11.37 billion of mortgage guarantees and 41% of total assets were pledged as security.
China’s property downturn continues to pressure sales, margins and financing. Management is pursuing an onshore bond restructuring—approved by bondholders in 2025—with options including cash repurchase, equity economic income rights and asset-backed settlement. A first tranche of cash repurchase for nine onshore bonds was completed in August 2026; further steps are pending.
Auditor BDO issued a disclaimer of conclusion on the interim financials, citing multiple material uncertainties over the group’s ability to continue as a going concern, including RMB17.03 billion of overdue bank and bond obligations, litigation exposures and reliance on successful refinancing, asset disposals and cost controls.
No interim dividend was declared.
Comments